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Money at foreclosure auctions

I was thinking of going to the county foreclosure auction next month to check it out, see how much some houses I would potentially interested sell for, and generally become more familiar with it. One question I have is typically the auction requires you to have the entire money for the sales price within 20 days. The only way I can think of coming up with that would be to have cash on hand. But possibly there is a way to get a loan from the bank? Just seeing if anyone had any experience with this and how they fund their auction purchases. I definitely think there are some good deals out there in my area and can get a loan for $100,000 to purchase normally, but don't have that kind of cash sitting around to use at an auction.

Another question I had was what happens to the houses that don't sell at the auction? Are they just held until the next month's auction, or could someone put in an offer for purchase with a realtor, similar to the normal path of buying a home. Thanks in advance!

Comments

Great idea going to an auction, you are likely to meet some great people there as well.

I would be very causious buying at an auction, as there's a ton of rules, pitfalls and the likes you have to look out for.

I have friend that have bough property on an auction, just to realize there was an actual 2nd mortgage on the house, which they became responsible for, which meant instead of the $70000 cost they had expected, they suddenly had a $50000 mortgage on top of that. Depending on your state etc, i would at least spent a bit of time looking into the specific rules about auctions and how you are generally protected.

Thanks for the input everyone. While I haven't moved on anything at an auction yet, I am checking them out just to learn and get experience. There were three house I somewhat mock followed and checked out before the auction and came up with a price I thought was reasonable to pay for them and still make a profit. Two of the houses sold for a bit more than what was reasonable for me, but the 3rd ended up being bought back by the bank. Right now I'm trying to track that bank down and see what I can work out with them. I will let you know if any progress is made!

Dave, if it is a big bank you are wasting your time. They won't sell it to an investor before it is listed with an REO agent. They have really strict processes for how they sell and using agents to get market value is one of those.

Thanks Mark. I am learning along the way and actually got in contact with the bank this morning right after I posted. Like you had said, they indicated I needed to wait for it be listed with a local agent. I'm going to keep tabs on this one and keep searching for that next deal!

We went to an absolute auction in Knoxville recently. Never been to one before. It was very interesting and a great learning experience. My wife and I plan to attend a few more and may look to get involved in a few months.